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A transaction in the forex trading market involves buying and selling of a particular currency wherein buying implies acquisition of a particular currency from the forex trading market by making a payment and selling implies the opposite. The particular currency is bought when its monetary value is expected to rise and then sold when the value has risen by a significant amount, the difference between the two values being the profit. Short selling of a currency is a practice which involves selling a forex trading currency when its value is expected to fall and then buying it back again at a lower value thus making a forex trading profit.
The backbone of the forex trading market is constituted by five major currencies and three minor currencies. The five major currencies are the US dollar, the British Pound, the Swiss Franc, the Euro and the Japanese Yen and the three minor currencies are the Australian dollar, Canadian dollar and the New Zealand dollar. Much of the trade in the forex trading market occurs in the five major currencies in form of various pairs and combinations although significant amount of forex trading involves the minor currencies as well.
An aspiring forex trader should be aware that the spinal cord of the forex trading market is formed by the five major currencies as well as the three minor currencies in which most of the trades are conducted. The US dollar, the Japanese Yen, the Euro, the Swiss Franc and the British Pound are the five major currencies and these are used in different combinations and pairs by the traders to earn forex trading profits. The Australian dollar, the New Zealand dollar and the Canadian dollar are the three minor currencies which are also used while forex trading.